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Seventh Circuit Confirms That ERISA Does Not Provide Remedy For Terminated Former Plan Administrator

Roberto Trujillo worked in the personnel department for the American Bar Association, and for a time also served as Plan Administrator for the ABA’s pension plan, which is governed by the Employee Retirement Income Security Act of 1974 (ERISA). In that capacity, Trujillo attended meetings of the ABA’s pension plan administration committee and provided guidance and information to the committee.

After two years in that position, Trujillo’s employment was terminated and the ABA removed him from the role of plan administrator. It seems that during that time Trujillo repeatedly alleged that the committee was mismanaging the plan and, in particular, that plan assets were being used for costs and expenses that the ABA itself should have paid. The committee obviously disagreed.

Not taking this perceived injustice lightly, Trujillo sued the ABA under ERISA section 502(a)(3), which authorizes any “participant, beneficiary, or fiduciary” to seek equitable relief to address violations of ERISA, including ERISA’s provisions forbidding retaliation for participating in ERISA inquiries or proceedings. See 29 U.S.C. sec. 1132(a)(3). Trujillo represented himself.

The district court dismissed Trujillo’s claim on a motion to dismiss, holding that ERISA’s remedial scheme did provide a cause of action for former fiduciaries to sue a plan or another fiduciary. The district court also held that section 502(a)(3) only allows fiduciaries to sue to help plan participants and beneficiaries, not to vindicate personal rights. Trujillo appealed, once again acting pro se.

The Seventh Circuit wasted no time or ink affirming the dismissal of the claim. The court found that it “need not” determine whether ERISA allowed former fiduciaries to sue to redress ERISA violations, although it noted that the three circuits that had considered this issue determined that ERISA did not allow as much.

Instead, the appellate court affirmed the dismissal on the grounds that section 502(a)(3) only permitted a fiduciary to sue for relief benefitting the plan, not for relief benefiting the fiduciary personally. The court stated, “Trujillo says he is suing as a fiduciary and refers to rampant ERISA violations that hurt the plan, but his request for relief reveals his true interest in bringing this suit: he asks only for reinstatement to his position as Plan Administrator with back pay or other equitable relief that will make him whole,” (emphasis in original). Because ERISA did not authorize such relief, Trujillo was out of court.

Surely this case is not groundbreaking ERISA precedent – the holding that section 502(a)(3) only authorizes suits by fiduciaries that seek to benefit the plan is not novel. I suppose the case does show what expense can be created by an individual who understands just enough about ERISA to create headaches for others. 

Copyright © 2017 Godfrey & Kahn S.C.

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About this Author

Todd Smith, Attorney, Godfrey Kahn Law Firm

Since joining the firm, Todd has helped clients resolve their most difficult commercial disputes, including those involving employee benefits and insurance coverage. Todd has represented parties in complex commercial litigation throughout the state and is a past president of the Western District of Wisconsin Bar Association, an association of lawyers practicing in the fast-moving federal district court in Madison. Todd is the leader of the firm's ERISA Litigation Team.

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